The Average Person Doesn't Know These 5 Things About Real Estate Investing

Last year's historical market performance (average home sale profits of $94,092) left many novice investors eager to hop into the market and earn some extra cash. But before you hop in, there are some things to know. Let's take a look at five things you need to know about the real estate market.

5 Stocks Under $49

Presented by Motley Fool Stock Advisor

We hear it over and over from investors, "I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of "5 Growth Stocks Under $49" for FREE for a limited time only.

When most people hear the words 'real estate investing', their minds quickly jump to the image of a landlord-tenant relationship. But did you know you could invest in real estate without having to work directly with tenants?

You can purchase fixer-uppers, become a real estate wholesaler, work with a crowdfunding platform, or invest in real estate investment trusts (REITs), syndications, or buy-and-hold properties. These options do not require you to become a landlord, and you still have the opportunity to maximize your profits in the real estate world.

ALSO READ: How to Invest in Real Estate: A Complete Guide

The world of real estate investing is vast and provides a plethora of opportunities to become an investor. Some investment strategies, like investing in REITs or working with a crowdfunding platform, only require you to spend a few minutes per day. With these strategies, you can participate in the real estate investment market with a click of a button.

You might be surprised to learn that you do not need to have a fortune the size of Warren Buffet's to get started in the market. There are plenty of opportunities to work with a crowdfunding platform where your real estate investment journey can start with as little as $500 down.

In the world of reality TV, a fix-and-flip happens within a matter of minutes, but that is not quite the case in real life. According to ATTOM data, in 2021, the average time it took to complete a fix-and-flip was 153 days.

The number of days it takes to fix and flip a property can be attributed to the time it takes to acquire the property, hire contractors, and sell the property. While you can expect this strategy to be a bit time-consuming, it still is pretty lucrative. According to ATTOM data, the average gross profit from flipping was $68,847 in the third quarter of 2021.

ALSO READ: Here's Where To Invest as a Fix-and-Flipper in 2022

This may come as a shocker, but you actually don't need to own any real estate to invest in the real estate market. By using strategies like investing in REITs, real estate notes, real estate mutual funds, or wholesaling, you do not have to own the property directly to hop into the market.

5 Stocks Under $49

Presented by Motley Fool Stock Advisor

We hear it over and over from investors, "I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of "5 Growth Stocks Under $49" for FREE for a limited time only.

Real estate investing can be a very lucrative endeavor, but do not hop in just because it's a new trend. Each strategy carries its own unique level of risk.

With April being financial literacy month, now is a great time to commit to investment research before hopping into the real real estate market. There are many ways to get involved in the market -- and with the right amount of skill and knowledge, you can even avoid entering the market as a novice.

The Motley Fool has a disclosure policy.